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TMI Blog2018 (11) TMI 1888X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee is allowed Addition being agricultural income - AO held that assessee has taken shelter of agricultural income to explain the unexplained investment in purchase of flat - HELD THAT:- Assessee had claimed agricultural income which was held to be income from other sources by the AO as according to him assessee could not prove the genuineness of claim - assessee had claimed agricultural income in AY 2009-10 and the claim of the assessee was accepted in the assessment framed u/s 143(3) of the Act. Before me, it is assessee s contention that the area of land in the year under consideration has not reduced and assessee had also placed on record the copy of 7/12 extract to prove the ownership of land and sample sale patties. The aforesaid contention of the assessee has not been controverted by Revenue. In such a situation, when the Ld.CIT(A) has accepted the agricultural income at ₹ 1,08,000/- and against which Revenue is not in appeal then on such facts, the contention of the assessee cannot be discarded without there being any material on record to prove that the claim of assessee is wrong - therefore set aside the order of LD.CIT(A) to the extent of ₹ 70,110 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO on account of creditors and sustained by CIT(A) under the provisions of section 69A is incorrect, not according to the provisions of law. The addition so made be deleted and, just and proper relief be granted to the appellant in this respect. With respect to additional ground, it is assessee s submission that the ground could not be raised earlier and it is a legal ground and it goes to the root of the matter and therefore it be admitted and adjudicated. Ld DR did not seriously object to the additional ground raised now by the assessee. Considering these facts and the fact that the ground being a legal ground, the same is admitted. 4. The additional ground raised being connected to ground no 1, both are considered together. 5. During the course of assessment proceedings, AO on perusing the Balance Sheet noticed that assessee had shown sundry creditors aggregating to ₹ 5,22,020/-. The Assessee was asked to substantiate the claim of sundry creditors by producing detailed addresses and the breakup of the amount outstanding. To verify the identity, genuineness and credit worthiness of sundry creditors, AO issued letters u/s 133(6) of the Act to all the cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso not known as to what compelled the appellant to furnish list of 7 creditors on 30.08.2011 and why it was revised by furnishing another list of 10 creditors on 28.01.2013. The appellant has not come out clean with the facts and an adverse inference has to be drawn against him. Instead of substantiating the claim made by him, the assessee has accused the AO of making addition on the basis of assumption/presumption and rather indulged in legal jargon stating that the AO had not specified the section under which the impugned addition was made. At the outset, I hold that the appellant has not discharged the onus that lay on him to explain the nature and genuineness of the alleged transactions. There is no evidence placed by the counsel of the appellant before the undersigned to show that the alleged creditors were genuine. It was held by Full Bench of Hon'ble Patna High Court in the case of CIT Vs. Nathulal Agarwalla Sons (153 ITR 292) that as to the nature of explanation offered by the assessee, it seems plain on principle that it is not the law that the moment any fantastic or unacceptable explanation is given, the burden placed on him will be discharged and presumption rebu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order has noted that assessee has not maintained the books of accounts and the case of the assessee is that he is assessed under presumptive tax u/s 44AE of the Act. The fact is that the turnover declared by the assessee has not been doubted or disturbed by the Revenue. I find that the Co-ordinate Bench of Chandigarh Tribunal in the case of Nand Lal Popli (supra) has held that where profits declared by the assessee under presumptive taxation was accepted, AO could not make separate addition by invoking provisions of Sec.69C of the Act. Before me, I find that the issue in the present ground is covered by the aforesaid decision of Tribunal in the case of Nand Lal Popli (Supra). Before me, Revenue has not placed any contrary binding decision in its support nor has pointed out as to how the decision in the case of Nand Lal Popli (supra) are not applicable to the present facts. I therefore relying on the aforesaid decision of Nand Lal Popli (supra) hold that no addition can be made u/s 69A in the present case and therefore direct its deletion. Thus the ground of assessee is allowed. 8. 2nd ground is with respect to addition of ₹ 1,78,110/- being agricultural income. 8.1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er property at artificially lowered prices. In the said society, some flats were reserved for the persons from socially backward classes such as SC, ST, VJNT. Some flats were reserved for economically backward classes as well. In 2010, several irregularities in allotment of flats at the said society came into light. This resulted into conducting of inquiry by various Govt. Departments including the Income Tax Department. The Income Tax Department at Mumbai had conducted inquiries as regards investment in the flats allotted by the Adarsh Housing Society at Mumbai. Since the appellant had also purchased a flat in Adarsh Housing Society, a notice was issued by the AO to the appellant to explain the sources of investment. In response, the appellant explained that he had made investment in the flat out of housing loan agricultural income. Moreover the agricultural income of ₹ 1,78,110/- was worked' out by the appellant on estimated basis. The appellant had multiplied the area in acre with the average yield per acre in quintals given by Commissionerate of Agricultural Crops Estimation Survey. The total yield was then again multiplied by estimated selling rate given by the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from other sources. There is no change in this factual position even during the present appellate proceedings. With this background, I am inclined to agree with the findings of the AO. The appellant has submitted sale pattis for agricultural income of ₹ 1,88,052/- but the genuineness of these is itself in doubt since the kachcha adatiyas issuing the sale bills could not corroborate the same either by entries in his books of account or by showing copies of counterfoils of the alleged receipts. Further the claim of agricultural income of the appellant is also, not supported by the vouchers for agricultural expenses. The copy of 7/12 extracts can't held conclusive. It is a settled law that classification of land in revenue records is also not conclusive and it must be backed up by evidence of actual agricultural operations (N K S Rengeswaran, 242 ITR 344 Madras High Court) wherein it was held that if there were no basic operations like titling, sowing, planting carried out on the land or subsequent operations like tending pruning, cutting harvesting and rendering the produce fit for the market and there was no evidence available before the authorities to show that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue records separately. From the copy of Form B-1 and P-2 submitted before us, we find that only name given is of Bhumiswami i.e., owner of agricultural land and not that of cultivator i.e., the assessee, which cast serious doubts whether assessee ever carried out any agricultural operations on this land. From the lease deed, a copy of which is placed at pages 4 5 of the compilation. We find that lease deed is undated which raises suspicion whether this lease deed is genuine or not. It is also very surprising that assessee could generate agricultural income of ₹ 1,80,000 on the piece of agricultural land which was taken on lease only for ₹ 22,000. We also find that CIT(A) wrongly calculated the figure of expenditure as found by Assessing Officer on the basis of statistics supplied by Director, Research, J.N.U. at ₹ 15,000 whereas such expenditure if these figures are applied should have been ₹ 68,000 approximately. Ld. CIT(A) has given unnecessarily weightage to the fact that assessee's father was agriculturist and owning agricultural implements and tractors etc. so he might have helped the assessee by lending such implements and providing such other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been utilized in self- consumption or meeting household expenses. In the current year, the appellant has himself shown meager agricultural income of ₹ 1,78,110/- whereas in the earlier years, it was allegedly shown as high as ₹ 8 lacs just to explain the sources of investment in the 'said flat. After due consideration of the facts, I find that in absence of vouchers and supporting evidences/records, an adverse inference needs to be drawn against the assessee. The appellant had failed to bring any concrete evidence in support of his alleged agricultural income. There is no change in this factual position even during the present appellate proceedings since the counsel of appellant has miserably failed to lead any evidence in this regard. It was held by Full Bench of Hon'ble Patna High Court in the case of CIT V s. Nathulal Agarwalla Sons (153 ITR 292) that as to the nature of explanation offered by the assessee, it seems plain on principle that it is not the law that the moment any fantastic or unacceptable explanation is given, the burden placed on him will be discharged and presumption rebutted. It is not the law, and perhaps hardly can be, that any and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aggrieved by the order of CIT(A), assessee is now in appeal. 9. Before me, Ld AR reiterated the submissions made before lower authorities and further submitted that assessee owned and cultivated about 27 acres of agricultural land situated at Village Asola, Dist Parbani, the land has borewell and tube wells and that the land was having enough water for cultivation. To prove the ownership of land, assessee had filed 7/12 extracts which has not been doubted by Revenue. He further submitted that in AY 2009-10, assessee had disclosed agricultural income of ₹ 1,08,590/- which was accepted and not disturbed in the assessment framed u/s 143(3) of the Act and in support of which he pointed to the income tax computation as determined in the assessment framed u/s 143(3) of the Act and placed on page 53 of the paper book. He submitted that the land holding of the assessee was same as in earlier years and in such a situation, the claim of the assessee could not have been rejected merely on the basis of presumption and more so when there is not a substantial income in agricultural income in the year under consideration as compared to earlier year. He therefore submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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